80 J. KRANE
have long felt comfortable with top-down Chinese autocratic state capitalism. That admiration now extends to the Chinese coal-driven energy
backbone. China was the UAE’s largest trading partner from 2014 to
2016, with some 300,000 Chinese residents and 4000 Chinese-owned
businesses in the UAE in 2018. 70 The Chinese government has encouraged its construction and engineering firms to seek markets for new coal
plants abroad due to declining demand in China. 71
Fifth, diversification to coal either reduces gas imports or frees it up
for higher-value uses in the UAE economy. These uses include those in
industry, where gas is both feedstock and heat source and as exportable
LNG. 72 Abu Dhabi exported 7.4 bcm as LNG in 2018. 73
Discussion and Conclusion
The project mix shaping the UAE’s electricity sector presents a fragmented mix of generation technologies, fuels, and geo-environmental
messaging. The glaring disconnect in policymaking between Abu Dhabi’s
clean energy push and Dubai’s more price-driven strategy raise the
possibility of future inter-emirate disputes. While both emirates pursue
diversification away from natural gas, Abu Dhabi’s power mix appears to
align with the future possibility of carbon taxation and border adjustment tariffs. Dubai’s does not. Coal-driven carbon emissions from Dubai
pose risks for the entire UAE, conceivably penalizing national exports by
rendering them less competitive than those from countries with smaller
footprints.
The Dubai-Abu Dhabi disconnect is the largest manifestation of a
misalignment in electricity policy that has Abu Dhabi and the Northern
Emirates ranking environmental criteria highly in their technology
choices, while Dubai and Sharjah prioritize cost-driven solutions that
increase autonomy from the central state. Also shaping the power portfolio are political rivalries with gas-rich Qatar and Iran, which appear to
be predisposing the UAE’s turn away from gas.
As these new power sources come online over the first half of the
2020s, one envisions the UAE increasing contributions from zero-carbon
nuclear and solar power, with natural gas eventually relegated to peak
periods and backup, a mix that comports well with the international
climate action agenda. Indeed, Abu Dhabi plans to reduce the gas
consumed by its power sector by as much as half, between 2018 and
2030. 74 However, if difficulties with intermittency and complexity cannot
have long felt comfortable with top-down Chinese autocratic state capitalism. That admiration now extends to the Chinese coal-driven energy
backbone. China was the UAE’s largest trading partner from 2014 to
2016, with some 300,000 Chinese residents and 4000 Chinese-owned
businesses in the UAE in 2018. 70 The Chinese government has encouraged its construction and engineering firms to seek markets for new coal
plants abroad due to declining demand in China. 71
Fifth, diversification to coal either reduces gas imports or frees it up
for higher-value uses in the UAE economy. These uses include those in
industry, where gas is both feedstock and heat source and as exportable
LNG. 72 Abu Dhabi exported 7.4 bcm as LNG in 2018. 73
Discussion and Conclusion
The project mix shaping the UAE’s electricity sector presents a fragmented mix of generation technologies, fuels, and geo-environmental
messaging. The glaring disconnect in policymaking between Abu Dhabi’s
clean energy push and Dubai’s more price-driven strategy raise the
possibility of future inter-emirate disputes. While both emirates pursue
diversification away from natural gas, Abu Dhabi’s power mix appears to
align with the future possibility of carbon taxation and border adjustment tariffs. Dubai’s does not. Coal-driven carbon emissions from Dubai
pose risks for the entire UAE, conceivably penalizing national exports by
rendering them less competitive than those from countries with smaller
footprints.
The Dubai-Abu Dhabi disconnect is the largest manifestation of a
misalignment in electricity policy that has Abu Dhabi and the Northern
Emirates ranking environmental criteria highly in their technology
choices, while Dubai and Sharjah prioritize cost-driven solutions that
increase autonomy from the central state. Also shaping the power portfolio are political rivalries with gas-rich Qatar and Iran, which appear to
be predisposing the UAE’s turn away from gas.
As these new power sources come online over the first half of the
2020s, one envisions the UAE increasing contributions from zero-carbon
nuclear and solar power, with natural gas eventually relegated to peak
periods and backup, a mix that comports well with the international
climate action agenda. Indeed, Abu Dhabi plans to reduce the gas
consumed by its power sector by as much as half, between 2018 and
2030. 74 However, if difficulties with intermittency and complexity cannot